Gusto’s payroll software is ideal for midsize companies processing payroll in-house, while Justworks’ PEO solution is ideal for small businesses that want to outsource HR.
Gusto and Justworks are two popular payroll and HR solutions created with small, midsize and growing businesses in mind. However, while both can help you process payroll, they do so in vastly different ways. While Gusto is a payroll software solution for businesses that want to run payroll in-house while offering useful employee benefits, Justworks is a professional employer organization, or PEO, which is a more fully fledged outsourced HR solution.
SEE: Payroll processing checklist (TechRepublic Premium)
| Gusto | Justworks | |
|---|---|---|
| Our rating | 4.6 out of 5 | 4.2 out of 5 |
| Starting monthly price | $49 + $6 per employee | $79 per employee |
| Unlimited monthly payroll runs | Yes | No |
| Mobile app for employers | No | Yes |
| Built-in time tracking | Yes | Yes |
| Health benefits administration | Yes | Yes |
| Accounting software integrations | Xero, QuickBooks Online, FreshBooks and more | Xero and QuickBooks Online |
Plan and pricing information up to date as of 5/22/2024.
Gusto has three payroll plans with a variety of HR and payroll tools that can accommodate small and midsize businesses, plus some enterprises. Like most payroll-first software, Gusto charges a monthly base fee plus a monthly fee per employee paid.
Gusto also has a contractor-only plan for employers that work solely with freelance contractors rather than in-house employees. The plan costs just $6 per contractor paid per month for the first six months. From that point onward, the plan costs $35 a month plus $6 per contractor paid.
Along with the standard payroll features built into each plan, Gusto offers a variety of add-on features for an additional fee:
Get a one-month free discount on your invoice after you subscribe and run your first payroll with Gusto. Other terms and conditions apply.
Justworks’ payroll software is just one component of its extensive PEO solution (note that Gusto is not a PEO solution). Since Justworks is considerably more comprehensive than a standalone payroll software system, it’s also much more expensive than Gusto.
Note that for the most part, Justworks’ PEO competitors don’t list their prices online. Justworks is one of the only exceptions, and its transparent, upfront pricing is a huge point in its favor. It also indicates that Justworks could be less expensive than many of its competitors, depending on the company and the services it offers.
Winner: Gusto
Gusto, like all of the best payroll software companies, includes unlimited payroll runs in its base package. In addition, Gusto offers a next-day direct deposit option, which is faster than the usual standard direct deposit timeline.
In contrast, Justworks doesn’t state upfront that it offers unlimited payroll runs. Instead, according to its site, Justworks users can “make all the domestic payments you need to across your team, at no additional cost.” The software also lets you make one-off payments at no additional cost, but the site doesn’t clarify if users can only run payroll monthly or choose from multiple pay schedules without fees.
Winner: Justworks
Both Gusto and Justworks offer automatic tax calculation, deduction and remittance. Both also include W-2 and 1099 tax form filing.
SEE: Data governance checklist for your organization (TechRepublic Premium)
However, Justworks has better compliance support than Gusto. The platform has several in-built tools to help you comply with state and federal laws, including online compliance training for staff. Justworks is also Employer Services Assurance Corporation certified, signifying strong financial, ethical and operational standards.
In contrast, while each Gusto plan includes a tax-filing accuracy guarantee, Gusto Premium is the only plan with proactive compliance alerts.
Winner: Gusto
Gusto’s in-house brokerage offers health, vision and dental insurance. If you choose a Gusto-brokered plan, you won’t pay a fee to integrate employee benefits with your payroll software. If you prefer the insurance companies you’re already using – or if Gusto doesn’t offer benefits in your state – you can integrate your existing employee benefits with Gusto for a $6 per-employee fee.
Gusto also offers optional benefits like 401(k) plans, commuter benefits and more, though adding these benefits costs an additional monthly fee.
Justworks offers medical, dental and vision insurance options for employers in all 50 states. However, you can only access Justworks’ insurance brokerage with the more expensive Plus plan. Health insurance integration is unavailable with the cheaper plan.
However, you can still offer some employee benefits with Justwork Basic. Both Justworks plans include access to life and disability insurance, health and wellness perks, 401(k) options and fitness memberships. Both plans also require you to sign up for workers’ compensation insurance.
Winner: Tie
Both Gusto and Justworks have mobile payroll apps that allow employees to access their payroll information from their smartphones.
Gusto has a mobile wallet app – available on Android and iPhone – that helps employees earn, save, spend and borrow from within their Gusto account.
Justworks makes all important employee information available via a simple, easy-to-use iPhone or Android app. Employees can access pay stubs, view and request time off, and see all of their insurance information from one place.
However, neither payroll provider has a payroll app for employers. While Gusto’s site is mobile-friendly, it doesn’t have a payroll app for employers who want to check their financial data or run payroll on the go.
Winner: Gusto
Both companies offer employee self-service options, but Gusto goes a step further by offering payroll self-onboarding. This feature allows employees to enter their own payroll information into the system, eliminating the need for employer involvement.
Winner: Gusto
When it comes to integrations, Gusto offers a much wider range of options, with integrations for accounting, time tracking, expense management and more. In total, Gusto integrates with more than 180 business applications. Justworks, on the other hand, only integrates with a few accounting software platforms such as QuickBooks Online and Xero.
The choice between Gusto and Justworks ultimately comes down to your business needs and preferences. Both platforms are powerful payroll solutions that offer a range of features to help businesses run payroll processing workflows smoothly and efficiently. You’ll also want to compare the benefits of payroll software services like Gusto vs. PEO solutions like Justworks.
Generally speaking, Gusto offers a more comprehensive set of payroll features with a wider range of integrations, making it the better option for businesses looking for an all-in-one in-house payroll solution with solid employee benefits administration.
On the other hand, if you’re looking for a PEO company that can take most aspects of HR and workforce management off your hands, Justworks is a more comprehensive – though more expensive – system than Gusto.
Read next: Best Payroll Software for Small Businesses (TechRepublic)
To write this review, we prioritized hands-on experience with the software by exploring Justworks’ sample plans and demos and setting up a free Gusto account. To round out our own experience and ensure we were providing a balanced review, we read user reviews on sites like Trustradius, Gartner Peer Insights, the Better Business Bureau, the App Store, Google Play, Consumer Affairs and more.
While we read reviews and test-drove the software for ourselves, we zeroed in on how Justworks and Gusto compared in five main categories:
Learn more about how we calculate star ratings and perform research on our payroll software review methodology piece.
Kylie McQuarrie has been writing about small businesses, payroll, and finance for ten years. While wrapping up her master's degree in English, she simultaneously leant her writing to small businesses struggling to reach customers in Canada, the US and Australia. She's been pursuing a professional writing career with a focus on business payroll and accounting ever since.
